This form is a Construction Contract. The form contains the following subjects: scope of work, work site, and insurance. The contractor's warranty is limited to defects in workmanship within the scope of the work performed by the contractor.
What is a Construction contract agreement?
If you’re planning to build, renovate or reconstruct your house, you will need to enter into a contract for home construction with the building contractor, defining your mutual rights and responsibilities. This agreement contains project specifics, the contractor’s license and insurance details, the requested scope of work, etc. It may also determine the potential lien on the property should the work not be paid in full.
Types of construction contracts
Depending on the payment arrangements determined by parties, there are four basic types of home builders’ contracts:
1. Fixed price (or lump-sum) agreements set the price for the completed job right from the start. Although fixed, the document may also include provisions defining penalties (for example, if the constructor fails to finish the work on schedule).
2. Cost plus construction agreements set the price for the finished work based on building materials and labor with additionally mentioned “plus” (a percentage of the total costs or a fixed fee).
3. Time and material agreements set the price for the work without a “plus,” but the client pays the contractor a daily or hourly rate while they are under contract.
4. Unit-price agreements are standard in bidding, particularly for federal building projects. Both owner and contractor define the price that the contractor charges for a standard unit without any specific extra fees for other units.
The first two types of contract for home construction mentioned are the most popular ones. Let’s take a closer look at them.
Fixed price vs. cost-plus contract benefits
The fixed price agreement benefits owners more than builders, as it determines at the moment the parties seal the deal the exact price the contractor will get after they complete all the work. Builders risk not getting the estimated profits they initially anticipated, as expenses may increase significantly but remain the constructor’s responsibility.
The cost-plus construction deal contains the evaluation of the final project cost; however, it doesn’t determine the final contract price until the contractor completes all the work. Unlike the fixed-price agreement, it separates expenses and sets the profit rate (as a percentage of the final project cost or as a flat amount), so contractors prefer this type of agreement; it is riskier for homeowners.
Information you should provide in the construction contract agreement
The presented Construction Contract for Home is a universal multi-state construction contract template. This sample describes typical terms for a home building contract. Download a printable document version from our website or amend and fill it out online. Make sure to provide the following information:
• Name and contact details of the contractor and their license number;
• Name and contact details of the homeowner;
• Property legal description from county clerk’s records;
• Project description with blueprints and building specifications;
• Scope, description of work, and its estimated final dates;
• Costs of work and responsibilities of parties for any breach of contract.
A Missouri Construction Contract for Home — Fixed Fee or Cost Plus is a legal agreement between a homeowner and a construction contractor outlining the terms and conditions of a construction project for a residential property in the state of Missouri. This type of contract provides clarity and protection for both parties involved in the construction process. The fixed fee or cost-plus structure refers to the two most common methods of pricing a construction project. In a fixed fee contract, the contractor provides a set price for the project. This means that regardless of any unforeseen circumstances or changes during the construction process, the homeowner pays the agreed-upon fixed fee. This method offers more predictability in terms of budgeting and allows homeowners to have a better understanding of the overall cost of the project. On the other hand, a cost-plus contract allows for more flexibility in pricing. In this type of contract, the contractor is reimbursed for the actual costs incurred during the project, including labor, materials, and overhead costs, plus a predetermined percentage or fee for profit and project management. This means that the final cost of the project may vary depending on the actual expenses involved. Cost-plus contracts are often used when the scope of work is uncertain or when the homeowner desires more involvement in the decision-making process throughout the construction project. While a Missouri Construction Contract for Home — Fixed Fee or Cost Plus generally follows a standard format, there may be variations depending on the specific needs of the project or the preferences of the parties involved. Some common types or variations of these contracts include: 1. Lump Sum Fixed Fee Contract: A fixed fee agreement where the contractor provides a single, all-inclusive price for completing the entire project, with no further adjustments based on actual costs. 2. Cost Plus Fixed Fee Contract: A variation of cost-plus contract where the contractor's fee is fixed, regardless of the actual costs incurred. This provides more predictability in terms of overall project cost. 3. Guaranteed Maximum Price (GMP) Contract: In this type of contract, the contractor guarantees that the project will not exceed a predetermined maximum price, which is usually determined through negotiations and careful estimation. If the final project costs are lower than the agreed-upon maximum price, the homeowner may be entitled to a credit or refund. 4. Time and Materials Contract: This is a variation of cost-plus contract in which the contractor charges the homeowner for the actual time spent on the project, along with the cost of materials used. This type of contract is often used when the scope of work is unclear or when changes are expected throughout the construction process. It is important for homeowners to carefully review and understand the terms and conditions of a Missouri Construction Contract for Home — Fixed Fee or Cost Plus before signing. Seeking legal counsel or consulting with a construction professional can help ensure that the contract protects the homeowner's interests and establishes clear expectations for the construction project.A Missouri Construction Contract for Home — Fixed Fee or Cost Plus is a legal agreement between a homeowner and a construction contractor outlining the terms and conditions of a construction project for a residential property in the state of Missouri. This type of contract provides clarity and protection for both parties involved in the construction process. The fixed fee or cost-plus structure refers to the two most common methods of pricing a construction project. In a fixed fee contract, the contractor provides a set price for the project. This means that regardless of any unforeseen circumstances or changes during the construction process, the homeowner pays the agreed-upon fixed fee. This method offers more predictability in terms of budgeting and allows homeowners to have a better understanding of the overall cost of the project. On the other hand, a cost-plus contract allows for more flexibility in pricing. In this type of contract, the contractor is reimbursed for the actual costs incurred during the project, including labor, materials, and overhead costs, plus a predetermined percentage or fee for profit and project management. This means that the final cost of the project may vary depending on the actual expenses involved. Cost-plus contracts are often used when the scope of work is uncertain or when the homeowner desires more involvement in the decision-making process throughout the construction project. While a Missouri Construction Contract for Home — Fixed Fee or Cost Plus generally follows a standard format, there may be variations depending on the specific needs of the project or the preferences of the parties involved. Some common types or variations of these contracts include: 1. Lump Sum Fixed Fee Contract: A fixed fee agreement where the contractor provides a single, all-inclusive price for completing the entire project, with no further adjustments based on actual costs. 2. Cost Plus Fixed Fee Contract: A variation of cost-plus contract where the contractor's fee is fixed, regardless of the actual costs incurred. This provides more predictability in terms of overall project cost. 3. Guaranteed Maximum Price (GMP) Contract: In this type of contract, the contractor guarantees that the project will not exceed a predetermined maximum price, which is usually determined through negotiations and careful estimation. If the final project costs are lower than the agreed-upon maximum price, the homeowner may be entitled to a credit or refund. 4. Time and Materials Contract: This is a variation of cost-plus contract in which the contractor charges the homeowner for the actual time spent on the project, along with the cost of materials used. This type of contract is often used when the scope of work is unclear or when changes are expected throughout the construction process. It is important for homeowners to carefully review and understand the terms and conditions of a Missouri Construction Contract for Home — Fixed Fee or Cost Plus before signing. Seeking legal counsel or consulting with a construction professional can help ensure that the contract protects the homeowner's interests and establishes clear expectations for the construction project.
